This regular feature is back again. The idea is that, over the weekend, you should post your thoughts in a more leisurely fashion than in ordinary comments or the Monday Message Board.
76 thoughts on “Weekend reflections”
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John Quiggin 
“Norton, I never claimed the entire public sector was unproductive.”
And tcfkaa, I never claimed that you personally held such a view. I was simply pointing out the absurd conclusions which follow from such a position, which *is* held by some. The only way in which you could interpret my last post as imputing that view to you as an individual is through the Althusserian Marxist practice of reading texts symptomatically, rather than properly.
Helen, you must admit that the purchase of an inordinately large quantity of Stilton cheese is the kind of unusual transaction which our intelligence agencies are right to take a close interest in. Also, the Lakes and the Torrible Zone and the Hills of the Chankly Bore sound like the sort of places in which Al Qaeda might have established training camps…:))
The public sector proportion of GDP has grown from approximately 6% at the time of federation to nearly 33% today. In the early to mid 1970s total taxation revenue as a proportion of GDP was about 26%.
I was around in the seventies and life seemed reasonable with a smaller government- free universal health care, free universities, free tafe, larger proportion in free public education, there weren’t toll roads all over the place and families could survive on one income. (they even had the dole back then)
Governments are self regulating monopolies (like an unregulated toll bridge that everybody has to cross) and as such they do not have any competition to keep them efficient. Well run normal businesses subject to competition, achieve greater economies of scale and become more efficient as they grow with the economy. Generally they employ less capital to provide more goods or services as they get bigger and achieve productivity gains. Looking at the government the opposite appears to be happening. They spend more capital to provide less goods or services as the economy grows, becoming less efficient over time. They Just legislate themselves more revenue for the sake of it.
In my dealings with the three tiers of government, I have noticed that certain sections of them are close to dysfunctional (NOT ALL PARTS). Federally things like the tax act an 8000 page logistical nightmare or middle class welfare “a joke”. Local councils who cant even collect the garbage properly let alone deal with a planning issue. And fiscally irresponsible state governments like Bob Carrs, who after ten years of siphoning nearly $3 billion out of Sydney water works out he has a water crisis.
Initially my view was to get rid of one tier of government but people on this blog convinced me it was better to retain a federal system to avoid centralising power. So to answer your question JOHN T cut 10% across the 3 levels of government and peg the public sector at 25% of GDP so they have fiscal responsibility mandated on them. That level of government interference worked well in the 1970s providing the government services you want mentioned above.
GoTF,
Since your post was a complete spray that accused me of several points of view that I do not hold, it is not exactly a constructive starting point.
Besides, as I said before, my only interest in starting this thread was the merits of the greens unfettered welfare access policy, and I now realize that the more who advocate such a policy the better for those on my side of politics, so I have no interest in arguing it anymore.
Econwit,
First, a small issue. You criticise local governments for their failure to collect the garbage properly. Many local governments employ private sector companies to do this work. It would be interesting to compare private and public “grabos” for quality of service. It would also be interesting to compare the employment situations of people employed by each.
More fundamentally, you appear to advocate increased regulation (or a decrease in self-regulation). Could you clarify whether you think international regulation is a good thing (WTO, IMF, IWC, ILO…)? Also, do you support increased regulation of business rather than self-regulation? Or do your theories just apply to governments?
GoTF
My observations only apply to the situation in Australia where we are over burdened with excessive bureaucracy and a wasteful, fiscally irresponsible public sector. I advocate a decrease in regulation and a decrease in the size of the public sector. The private sector can do what they like with their money because it is theirs. My observations only apply to the public sector as they are wasting our money.
I presume “garbos” would be given their prevailing award wage and conditions or equivalent, whether employed by the public or private sectors. What I object to is the filth on the streets and it is the local governments job to direct rates so that they are kept clean. In NSW LGAs t appear to have trouble doing this because they want to do everything except what they are suppose to be doing.
Econwit,
I don’t agree that the private sector should be able to do whatever they want with their money. Clearly some limitations are needed. At a minimum, bribery and corruption are unacceptable. No matter how much money you have, you should not be able to ‘buy’ certain things – for example, a favourable outcome in a trial or discrimination in your favour in a tendering process. If society sets out to prevent these, then regulation of some form must be brought into play. Ultimately, there is a normative judgement about what level of regulation is acceptable.
I’m sure you would agree, regulation of private property rights is acceptable and necessary. No amount of money should be able to subvert such regulation. Again, the amount of regulation is a normative decision. An example can be made of intellectual property rights – there is international regulation in favour of preserving IP rights. It is both an ‘increase’ in regulation and a normative judgement that such regulation is acceptable. If regulation of the private sector is unacceptable, should such regulation also be abandoned? Despite the protectionist tone of TRIPS I doubt many free market and free trade economists would turn around and call for the abolition of intellectual property rights.
What I detect is an underlying preference for the status quo in matters of wealth and property. Regulation is bad if it redistributes wealth. Regulation is good if it protects existing owners of wealth and property. It may be disguised as economic liberalism, but it is fundamentally conservative.
My concern is best demonstrated by a hypothetical. Consider a child born to alcoholic parents who have substantial debts and who live in a relatively improverished area. Currently, that child has some hope: public education is available, there is a health and welfare system that can provide for the child, and university education is accessible. Although it would be a struggle, that child has a chance at a professional career and a chance to live a decent life. If we follow the thesis suggested by some in the above forum, then we should downgrade public services and increase private sector involvement in traditional areas of public activity. What happens to that child when education and healthcare are provided on a user-pays basis?
Two criticisms could be made of my scenario. The first would be to argue that the government should not withdraw from this particular situation. However, I could just as easily create a scenario involving an adult who becomes an invalid due to an accident (in which no one is to blame). There are many such scenarios and if we make exceptions for them all then we come close to supporting universal free education and healthcare.
The second potential criticism is that private charity would provide for the child. I am not at all convinced by this argument which depends on homo economicus acting altruistically. More than this, I cannot see why it is better to depend on voluntary private charity (subject to the whims and fancies of individuals) than it is to rely on mandatory contribution to public services in a systematic and non-discriminatory manner.
In the end, I view the argument presented by Econwit as a conservative endorsement of the status quo veiled as some sort of liberal utopia. The argument is built on a set of normative judgements, and arbitrary decisions about acceptable levels of public and private activity and regulation. I am willing to reach a different conclusion based on equally normative concerns. Private sector regulation is acceptable if it is in the common good, or in the interests of a vulnerable member of society who would otherwise be denied opportunities simply because of circumstances beyond their control.
“Yobbo, if people were paid what their jobs were worth, then even with a minimum wage, teachers should be earning six-figure sums and live in mansions. Politicians on the other hand would be earning a lot less than they do.”
Teachers in private schools in Australia receive market rates, and not many of them are on 6 figures.
“Also, please forgive me, but I feel that your analogy about glandular problems with respect to concentration camps and the third world is in very poor taste.”
It wasn’t an analogy, it was a statement of fact. Soldiers who liberated WW2 prison and concentration camps did not find any fat people, only people who had baggy skin where fat had once been.
If you find the fact that fat people are predominantly fat because they eat too much distasteful – I’m sorry, there’s not a lot I can do about that.
“Still, I’m willing to go along with these fools. But I’ll do so subject to conditions – cut government spending on corporate bludgers”
Your terms are acceptable. But please, in the future try to avoid subscribing views to me without knowing where I actually stand.
Sure, I’ll explain. There are many ways to cut down on the unemployment rate. You could kill all the worthless people, for example or put them into some kind of forced labor camps. See, these solutions will definitely work, but the problem is that they are deemed unacceptable in a civilized society. Getting rid of the minimum wage is, at this point in time, one of these unacceptable solutions, albeit less radical than my other examples.
This is my humble contribution to the debate, although I have to give some credit to the old Irish guy named Jonathan Swift.
Apologies in advance for violating John’s civilised discussion rules, but you sir, are an idiot.
The weekend is over,chaps and lassies.
Back to productive work to keep the economy running.
Think widgets that other countries have not thought about!
Great, this is the second time in the last two week I am called ‘idiot’. My self-esteem is completely ruined now.
GoTF
We seem to have some major philosophical differences.
“I don’t agree that the private sector should be able to do whatever they want with their money. Clearly some limitations are needed”.
What you are advocating is limiting an individuals liberty. “The object of civil society is justice, not truth, virtue, wealth, knowledge, glory or power. Justice is followed by equality and liberty.�
There is a wide held perception that people are born with freedom of choice and that includes a choice or action that might in some instances break a law. You can legislate to drive on the left hand side of the road, but every now and then you might have to break that law to get to where you want to go and on rare occasions a fatality occurs. So should we ban driving? Lets make a “normative judgement” on what policy we should adopt and have an 8000 page document on the back seat so that we can consult it every time we do a right hand turn into a drive way. .
You can not legislate against stupidity and also if someone breaks a law and gets caught they will suffer the consequences. Maybe, one day the bureaucrats will be able to implant chips in people to control their actions and prevent theses sort of problems, but in the mean time I would like to keep my freedom.
I have to deal on a daily basis with the growing bureaucratic madness inflicted on this country. I see first hand many people abusing the welfare system. I see first hand many people abusing the unfair dismissal laws and the workers compensation system. I have to deal first hand with pay as you go tax, payroll tax, many types of stamp duties, GST, fuel excises, land tax, vendor exit tax, import duties, road tolls, environmental levies, section 94 contributions, council rates, water rates, various other hidden and non hidden government fees and charges- plus jump through the logistical hoops associated with the implementation of this mad and forever growing tax revenue system.
You seem to imply I am proposing anarchy, well the current dysfunctional system isn’t far from it.
I find moderation is a good maxim to live by and that maxim should be applied as moderation in government also. That is what I am advocating, reverting the public sector back to the proportional size it was in the 1970s, with total revenues pegged at 25% of GDP, back from the present 33%. In government “everybody likes to get as much power as circumstances allow, and nobody will vote for a self-denying ordinance.â€? So government needs to have limitations imposed to make them accountable.
As you correctly pointed out governments should regulate . They definitely should not have some commo agenda for redistributing wealth.(they tried that in the Soviet Union- news flash the experiment failed). They also need to be accountable.The bureaucracy is not accountable to anybody- the elected representatives or the people they presumably serve.
Yes they should provide some sort of safety net for those that need it (but not the behemoth social security system we have now). And as I said above, in the 1970s with a smaller total public sector utilising only 25% of GDP they still provided free universal health care, free universities, free tafe, a larger proportion of students in free public education and there weren’t toll roads all over the place.
To steal a quote from yobbo “please, in the future try to avoid subscribing views to me without knowing where I actually stand.” I’m not left, I’m not right, I’m not straight down the middle- I’m all over the place.
Econwit,
I’m not so sure we have a fundamental ideological difference on this. We both agree that governments should regulate. Our difference of opinion centres on what they should regulate. I view government regulation of the economy and of society as acceptable subject to human rights and civil rights being maintained.
There is a big difference between endorsing regulation and placing absolute constraints on liberty. I am not advocating the latter; I am advocating a regulatory system designed to ensure society is fair and just. The maximum amount of liberty consistent with this should be maintained.
As you correctly point out, regulation need not remove individual liberty. Instead it can be used to alter the payoff for certain actions. With your example regarding driving on the correct side of the road, regulations require this, subject to exceptions (for example, emergencies). The individual is still able to choose which side of the road to drive on, regulations apply penalties to certain choices in an effort to maximise the benefit to society. You rely on hyperbole when you imply I am advocating banning driving. I’m not. I do however think that it is reasonable for regulations to be used to alter the choices individuals make. I’m not sure why you think that a normative judgement on this issue would take 8000 pages, but clearly it wouldn’t. However, the present outcome is based on normative judgements regarding the sanctions for breaking the law and regarding the circumstances in which one may do so.
More generally, you take a very narrow view of liberty. You appear to see liberty as lack of government. I suggest that liberty needs to consider a wider set of social issues and should include both the options available to people and the ability of people to exercise those options. Is it wrong to suggest that society should seek to ensure as many individuals as possible have the capacity to exercise as many choices as possible?
You also rely on gross exaggeration when you link redistribution of wealth with the failure of the Soviet system. The Soviet system failed for many reasons and not simply because of income redistribution. One big problem was massive (and unsustainable) military spending. You choose to neglect this and instead focus on income redistribution.
Almost every modern society has some form of income redistribution. Most have had such a system for decades and did so during the Cold War. To draw an analogy between Soviet totalitarianism and income redistribution in Australia is a spectacular rhetorical flourish but is a logical fallacy.
I’ll concede that there are problems with the accountability of bureaucrats. Take the recent failings of DIMIA. But, bureacrats are accountable to elected representatives and to the electorate, the problem is that politicians choose not to sack hopeless bureaucrats and the public reacts with indifference to maladministration.
So, I’ll join with you Econwit in calling for a public campaign against the Howard government…
As far as I am concerned Howard has only helped the ‘revenue lobby’. My perception is to a lesser degree than labour would. I will see if upper house control improves his performance. They are all politicians to me and none of them should stay there to long.
Econwit:
“You [GoTF] seem to imply I am proposing anarchy…”
I don’t think GoTF actually did imply that, but I’ll come right out and say it. You are proposing anarchy, dressed up in the now fashionable libertarian rhetoric. It’s a rather useless philosophy, which allows its adherents to whine endlessly about the way things are, without ever having to deal with real world problems in any concrete way.
“Get rid of government” is the magical solution to everything, and centuries of experience with different political systems are wilfully disregarded.You should wish for a pony to go with your utopia.
Ah, the imaginary seventies, where there was no harbour bridge toll, no toll on the F3 and F6, where no-one had to pay taxes to support the free universities, where everything was free, including health care, years before the terrible socialist introduction of actual free health care (in 1984). Sigh. Them were the good old days.
They were.
What ever turns you on SJ. I don’t have any desire for a pony. Bestiality isn’t my scene.
I’ll get out of your way so you can “deal with real world problems in a concrete way.”
“What ever turns you on SJ. I don’t have any desire for a pony. Bestiality isn’t my scene.”
Nor is rational thought, apparently.
Your observations regarding my ability to perform rational thought could be accurate- I don’t know? Anyway it is a private matter between me and my therapist, so I would appreciate it if was not debated in a public forum such as this one.
Calling to question the rationality of our arguments is another matter totally suitable here.
You put forward that some one who possesses a particular political view should also possess the desire for an animal (wish for this political view, wish for that political view and always wish for a pony).
You seem content to totally misrepresent an opposing viewpoint to try to enhance your flawed position.
You equate the view that the sponging public sector has grown to big and needs to culled back to the sustainable level it was 30 years ago to “anarchy, dressed up in the now fashionable libertarian rhetoric”.
see:
http://www.abs.gov.au/ausstats/abs@.nsf/94713ad445ff1425ca25682000192af2/a6e24932616f91edca2569de00296982!OpenDocumenthttp://www.abs.gov.au/ausstats/abs@.nsf/94713ad445ff1425ca25682000192af2/a6e24932616f91edca2569de00296982!OpenDocument
You can be in denial that the public sector has more than its fair share of bludgers or that the social security system is managed poorly, having dole bludgers, defacto families getting single mother pensions and middle class welfare, but your failure to confront these issues head on can only be seen as a lack of commitment to your argument.
So stop dreaming about ponies and “deal with real world problems in any concrete way.”
Yobbo,
I only believe in giving welfare to those genuinely unable to work: eg the genuinely disabled [you can’t demand that quadraplegic cerebral palsy sufferers find gainful employment]. Even the US has disability pensions.
The point of activity tests is precisely to “give people the shits”. It should be as uncomfortable as possible to draw the dole if you can actually work. Of course, as you point out, the policy needs to be coupled with a cut in the minimum wage so that those at the bottom end are not priced out of a job.
The alternative to activity tests is to have welfare cut out after a period (as it does in the US), but I can’t see Australian society tolerating the consequences of that (large increase in homelessness).
Of course, we also need to tackle middle class welfare and slash the public service. I’m with Econowit – cap all govt spending at no more than 25% of GDP. And that includes during recessions, so the govt also has to cut when everyone else is hurting.
I’ll never forget visting Canberra for my first time during the “recession we had to have” and talking to bureaucrats about the carnage in the rest of Australia, particularly the “For Lease” signs on so many CBD commercial properties. Needless to say, the bureaucrats were completely surprised – they had no knowledge of the conditions outside their hermetically sealed, taxpayer-funded socialist utopia.
“The point of activity tests is precisely to “give people the shitsâ€?. It should be as uncomfortable as possible to draw the dole if you can actually work.” (Former Anon, 2005) I say we line the unemployed up in the streets, stab them with spears and give them a decent whipping. That ought to make those dole-bludgers even more uncomfortable.
A policy that is designed to make people uncomfortable and which effectively punishes them because they are unemployed is unhelpful and counter-productive. First, the unemployed are human beings worthy of dignity and respect. Purposefully making them suffer is morally bankrupt. Second, a punitive policy for the unemployed will not help shift the unemployed into work. Training and support programs will. It may well cost money and may well require us to pay our taxes, but such a policy is miles ahead of the sort you seem to prefer, Former Anon. What good does it do to make the unemployed miserable? To make them trek all over the place chasing ephemeral jobs which they can list in a dole-diary? The unemployed simply end up depressed and resentful. As a society and as decent human beings we would do better to provide counselling, assistance and training.
Libertarianism? Free to be exploited. Free to be oppressed. Free to be discriminated against. What sort of freedom is this? And let’s look at a country with no government – Afghanistan. Is that something to emulate? Libertarianism is idiocy promoted by complacent individuals living in societies which provide the social structure and support necessary for them to indulge their fantasies.
It’s not just that “Happiness is a Warm Gun”. For libertarians, freedom is a warm gun. Because in the end, that is what they are advocating: not the rule of law or democracy, but the rule of those with power and wealth. And all in the name of freedom.
Sorry, GoTF, I completely missed those obvious points. How daft of me.
Please give me my free housing (and make it a big one in a nice neighbourhood because you don’t want me to feel disadvantaged now, do you?). Give me my free schooling, free health care, free childcare, and lets see, maybe around $800 per week, no make that $900 so I can afford payment on a decent car (after all, I’m living in a decent neighbourhood and you wouldn’t want me to feel disadvantaged, would you?).
Is that the alarm going off? Ah, bugger it, it’s only 9:30 and all I’ve got this morning is that voluntary job interview. Besides, I am meeting my mates at the pub at noon and I’ve barely recovered from last night. Maybe I’ll look for work next week.
Former Anon, you’re stereoptypes of the unemployed are inaccurate. It might make your argument easier if you assume all unemployed don’t want to find work and spend their days and nights at the pub, but you end up with a set of conclusions that simply do not apply to reality.
And, at no point have I suggested welfare should bring everyone up to the levels of wealth you suggest. $800 per week for a car? No. But enough money to mean that you can get to job interviews, buy food and take part in the occassional leisure activity. Free housing? If you cannot afford housing and would end up on the streets, fair enough. Free healthcare, education and childcare? It’s to the benefit of society as a whole if citizens are well-educated and healthy. If childcare is necessary to allow parents to work or to ensure the child is not neglected, then it should be provided. Again, there are benefits to society as a whole.
$800 or $900 per week for a car? Mate, it would take me a fortnight to pay for my car if that was the amount available to me!
“…and lets see, maybe around $800 per week, no make that $900 so I can afford payment on a decent car…”
ie – $100 extra for a car payment, not $900 for a car payment.
And no, I don’t assume that all unemployed don’t want to work. But I do assume that if you provide unfettered access to welfare then there are plenty of people who are capable of work that will take up your offer.
Former Anon, sorry about the mistake. Your correction makes your argument so much more reasonable!
So, welfare is okay, so long as there are regulations? Hmmm… sounds just like the system we have, and have had for decades.
One fallacy floating around hereabouts is that the amount of work people do is connected with the value they produce. Not when the market is rigged, it isn’t. The waste of the public sector and its services (like teaching) aren’t moral statements about the effort public servants put in. If anything, it’s a measure of how trapped they are too.
And the Libertarianism side of how wonderful things would otherwise be is defective two ways. One is the way that this shallow sort is called vulagar libertarianism by the likes of Kevin Carson, who recognise these very flaws and see improvement only in working past them. And the other is that it stereotypes; Libertarianism would indeed deliver those benefits – for the survivors.
The shallow view suffers from not recognising the casualties. The objection to a quasi-Libertarian end state fails to recognise that today’s efforts do not merely address the symptoms, they tread down everybody across the board and actually increase dependence on this futile supportive treatment.
I don’t want to see us casting people adrift, but I do want efforts directed at getting us out of the mess rather than supported in it while it gets ever worse.